scholarly journals Lending Relationships and Credit Rationing: The Impact of Securitization

2011 ◽  
Author(s):  
Santiago Carbo-Valverde ◽  
Hans Degryse ◽  
Francisco Rodríguez-Fernández
Keyword(s):  
Credit Rationing ◽  
Lending Relationships ◽  
The Impact

scholarly journals Lending Relationships and Credit Rationing: The Impact of Securitization

2012 ◽  
Author(s):  
Santiago Carbo-Valverde ◽  
Hans Degryse ◽  
Francisco Rodriguez Fernandez
Keyword(s):  
Credit Rationing ◽  
Lending Relationships ◽  
The Impact

scholarly journals Lending Relationships and Credit Rationing: The Impact of Securitization

2011 ◽  
Author(s):  
Hans Degryse ◽  
Santiago Carbo ◽  
Francisco Rodriguez Fernandez
Keyword(s):  
Credit Rationing ◽  
Lending Relationships ◽  
The Impact

scholarly journals The impact of credit rationing on farmer’s economic equilibrium

2009 ◽  
Vol 55 (No. 11) ◽  
pp. 541-549 ◽  
Author(s):  
L. Čechura
Keyword(s):  
Capital Accumulation ◽  
Control Variable ◽  
Credit Rationing ◽  
Adjustment Costs ◽  
Investment Model ◽  
Economic Equilibrium ◽  
Dynamic Investment ◽  
Dynamic Optimization Model ◽  
Investment Spending ◽  
The Impact

The paper deals with the theoretical analysis of the impact of credit rationing on farmer’s economic equilibrium. The analysis is carried out based on the derived dynamic optimization model, which is the dynamic investment model with adjustment costs. The credit rationing is introduced by imposing an upper limit on the control variable, which is in this case represented by the investment spending. Then, the optimal control is used to solve the optimization problem in the situation of both with and without credit constraints. Finally, the situations without and with credit rationing are compared. The results show that the occurrence of credit rationing or in general financial constraints significantly determines the capital accumulation and investment decisions of farmers and as a result their supply functions.

Lending relationships, credit ratings and bank loan spreads: evidence from Indonesian listed companies

2020 ◽  
Vol 16 (4) ◽  
pp. 455-479
Author(s):  
Yane Chandera ◽  
Lukas Setia-Atmaja
Keyword(s):  
Fixed Effects ◽  
Credit Ratings ◽  
Listed Companies ◽  
Bank Loan ◽  
Least Squares Regression ◽  
Firm Level ◽  
Content Type ◽  
Lending Relationships ◽  
Loan Spreads ◽  
The Impact

PurposeThis study examines the impact of firm-bank relationships on bank loan spreads and the mitigating role of firm credit ratings on that impact.Design/methodology/approachThe study sample consists of Indonesian publicly listed companies for the period 2006 to 2016; bank-loan data was extracted from the Loan Pricing Corporation Dealscan database. For the degree of firm-bank relationships, the data on each loan is manually computed, using five different methods taken from Bharath et al. (2011) and Fields et al. (2012). All of the regression analyses are controlled for the year fixed effects, heteroscedasticity, and firm-level clustering. To address the endogeneity issues, this study uses several methods, including partitioning the sample, running nearest-neighbour and propensity score matching tests, and using instrumental variables in two-staged least-squares regression models.FindingsIn line with relationship theory and in opposition to the hold-up argument, this study finds that lending relationships reduce bank loan spreads and that the impact is more noticeable among non-rated Indonesian firms. Specifically, each additional unit in the total number of years of a firm-bank relationship and the number of previous loan contracts with the same bank are associated with 7.34 and 9.15 basis-point decreases, respectively, in these loan spreads.Practical implicationsCorporations and banks should maintain close, long-term relationships to reduce the screening and monitoring costs of borrowing. Regulators should create public policies that encourage banks to put more emphasis on relationships in their lending practices, especially in relation to crisis-prone companies.Originality/valueTo the best of the authors’ knowledge, this is the first study to examine the impact of lending relationships on bank loan spreads in Indonesia. The study offers insights on banking relationships in emerging markets with concentrated banking industries, underdeveloped capital markets and prominent business-group affiliations.

scholarly journals The Price Impact of Lending Relationships

2015 ◽  
Vol 16 (3) ◽  
pp. 367-389 ◽  
Author(s):  
Ingrid Stein
Keyword(s):  
Strong Relationship ◽  
Price Impact ◽  
Bank Debt ◽  
Relationship Strength ◽  
Borrowing Costs ◽  
Lending Relationships ◽  
Relationship Length ◽  
The Impact ◽  
Over Time

Abstract This study analyzes the impact of bank relationships on a firm’s borrowing costs. We find that a firm’s borrowing costs decrease with relationship strength, proxied by the share of bank debt provided by the lender. Borrowing costs, however, rise with relationship length. While the increase over time is weak on average, bank-dependent borrowers face a substantial premium after several relationship years. Switching the lender initially leads to only a small price discount on average. However, the discount is considerable for borrowers that switch and had a strong relationship with their previous lender. Our results suggest that close lending relationships lead to benefits for the firm, but may also imply hold-up costs in the long term.

The Anatomy of a Credit Supply Shock: Evidence from an Internal Credit Market

2018 ◽  
Vol 53 (2) ◽  
pp. 547-579 ◽  
Author(s):  
José María Liberti ◽  
Jason Sturgess
Keyword(s):  
Credit Rationing ◽  
Financing Constraints ◽  
Lending Relationships ◽  
Lending Channel ◽  
Credit Supply ◽  
Supply Shock ◽  
Level Data ◽  
Channel Effects ◽  
Post Shock ◽  
Micro Level

We investigate how financial contracting interacts with lending-channel effects by tracing the anatomy of a credit supply shock using micro-level data from a multinational bank. Borrowers with stronger lending relationships, higher nonlending revenues, and those that pledge collateral, especially outside assets and real estate, experience less credit rationing. Consistent with a tightening of financing constraints post shock, borrower composition shifts toward larger and less risky firms, and loans exhibit higher collateralization rates. Our analysis highlights the value of relationships and suggests that relationship banking is a channel through which borrowers can mitigate lending-channel effects.

scholarly journals Impact of credit rationing on capital allocated to inputs used by rice farmers in the Mekong River Delta, Vietnam

2020 ◽  
Vol 22 (1) ◽  
pp. 47-60
Author(s):  
Cao Van Hon ◽  
Le Khuong Ninh
Keyword(s):  
Household Head ◽  
Credit Rationing ◽  
River Delta ◽  
Mekong River ◽  
Probit Regression ◽  
Credit Institution ◽  
Content Type ◽  
Mekong River Delta ◽  
Rice Farmers ◽  
The Impact

PurposeThe purpose of this paper is to estimate the impact of credit rationing on the amount of capital allocated to inputs used by rice farmers in the Mekong River Delta (MRD).Design/methodology/approachBased on the literature review, the authors propose nine hypotheses on the determinants of access of rice farmers to credit and four hypotheses on the impact of credit rationing on the amount of capital allocated to inputs used by rice farmers in the MRD. Data were collected from 1,168 farmer households randomly selected out of 10 provinces (city) in the MRD.FindingsStep 1 of propensity score matching (PSM) with probit regression shows that land value, income, education, gender of household head and geographical distance to the nearest credit institution affect the degree of credit rationing facing rice farmers. Step 2 of PSM estimator identifies that the amount of capital allocated to inputs such as fertilizer and hired labour increases when credit rationing decreases while that allocated to seed and pesticide is not influenced by credit rationing because rice farmers use these inputs adamantly regardless of effectiveness.Originality/valueThis paper sheds light on the impact of credit rationing on the amount of capital allocated to inputs used by rice farmers, which is largely different from the main focus of the extant literature just on the determinants of credit rationing facing farmers in general and rice farmers in particular.

scholarly journals Bank Financing and Firms Performance in Sub-Saharan Africa: Evidence of Cameroon and Senegal

2020 ◽  
Vol 12 (5) ◽  
pp. 42
Author(s):  
Agbemebia Akitan ◽  
Seydi Ababacar Dieng
Keyword(s):  
Negative Impact ◽  
Credit Rationing ◽  
Sub Saharan Africa ◽  
Sales Growth ◽  
Access To Credit ◽  
Bank Financing ◽  
Relational Behavior ◽  
The Common ◽  
Sub Saharan ◽  
The Impact

Using survey data, the aim of this paper is to analyze the impact of bank financing on firms performance both in Cameroon and Senegal. Performance is measured in terms of sales growth. Our methodology is based on an analysis of variance to test if access to credit leads to a difference in performance and on econometric modeling. The main estimation result is that bank financing has a negative impact on firms performance. This result is explained by the credit rationing and the lack of relational behavior on the credit market. Our findings suggest the establishment of a close bank-enterprise relationship in the common quest to promote economic growth.

scholarly journals Study on the Phenomenon of Bank Liquidity Tail

2017 ◽  
Vol 6 (2) ◽  
pp. 1
Author(s):  
Hongjian Qu ◽  
Jianchun Zhou
Keyword(s):  
Central Bank ◽  
Interest Rates ◽  
Negative Impact ◽  
External Environment ◽  
Credit Rationing ◽  
Foreign Banks ◽  
Open Market ◽  
Environment Change ◽  
Supervision System ◽  
The Impact

The entry of foreign banks, the spread of financial crisis, the marketization of interest rates and the impact of the point of time assessment lead to the phenomenon of bank liquidity tail, which has a negative impact on commercial banks, the financial system and the national economy. This paper is based on the current situation of the phenomenon of bank liquidity tail, analyzes the reasons of bank liquidity tail from two aspects of management and supervision system of bank liquidity, and proceed from the inner bank, the central bank's monetary policy, the external environment and so on, to find credit mismatches, credit term structure mismatch, the end of the month to pay the deposit reserve, the central bank focused on open market operations, the external macro environment are the main factors of bank liquidity tail. Therefore, this paper puts forward some countermeasures to solve the problem of bank liquidity from the perspective of liquidity supervision system, the bank's own management mode, the central bank credit rationing and the external environment change.

The Effect of Financial Constraint on Farmers’ Health: Evidence from Rural China.

2021 ◽  
Vol 8 (4) ◽  
pp. 415-437
Author(s):  
Henry Orach ◽  
Chen Pu ◽  
Shen Qianling ◽  
Wei Shiying ◽  
Hassan Ssewajje ◽  
...  
Keyword(s):  
Health Status ◽  
Rural China ◽  
Credit Rationing ◽  
Probit Model ◽  
Good Health ◽  
Rural Household ◽  
Access To Credit ◽  
Rural Farmers ◽  
Negative Effect ◽  
The Impact

Health is an important tool to farmers. However, percentage of farmers are unable to obtain good health due to inadequate capital and inadequate access to credit from financial institutions. Using China’s rural household income survey (CHIP) database conducted in 2014, this study contributes to the literatures by analyzing the effect of credit rationing on rural farmers’ health status. Ordered probit model was used to evaluate the impact of credit rationing on farmers’ health status. Credit rationing was found to play the negative role of hindering rural farmers from accessing good health status. This study definitely answers the question regarding the negative effect of credit rationing on the health status of rural household farmers. Further study to establish causal relationships using time-variants/panel datasets.

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